Given all the other crises President Obama is juggling right now, the federal deficit is -- as it should be -- among the least of his worries.

What the economy needs at this point is more government spending, not less.To the extent that there are some things that can be done now to reduce the deficit in the long run -- most notably, taming health care costs -- Obama is very much on the case.

Yet as Manu Raju noted for Politico last week, Republicans think Obama's biggest political vulnerability is on the issue of government spending -- and they intend to make Obama "own" the deficit by the time the 2010 elections come around.

New York Times business columnist David Leonhardt put all this in its proper context last week, explaining that most of the blame for the projected deficits in the next 10 years belongs to George W. Bush, and that only 10 percent can be traced to Obama -- mostly from the stimulus package required to revive the moribund economy he inherited.

the White House has become increasingly concerned that President Obama's spending plans, which would require $9 trillion in government borrowing over the next decade, could become a political liability that defines the 2010 midterm elections.

The concern was reflected in the aggressive response from administration officials to criticism that money from Obama's stimulus plan is arriving too slowly to help the languishing economy, as well as in the president's public endorsement of "pay as you go" legislation, which would require Congress to make room for new non-discretionary spending with equivalent cuts to other parts of the budget. Yesterday, Obama also outlined billions of dollars in savings that would be used to pay for his health-care reform proposal.

But there is evidence of growing public concern over his fiscal policies. As he traveled Thursday in Green Bay, Wis., Obama was greeted by demonstrators holding signs that said, "No socialism" and "Taxed Enough Yet?"

And, Wilson, writes:

even some leaders in his own party are calling on the president to soon begin making those difficult choices, despite a fragile economy that remains in recession.

But I don't think any of this is really new. Obama has been defending the stimulus ever since he proposed it. He always intended to propose cuts to pay for his health-care overhaul. A couple protest signs don't signify much to me. And there have been Democratic deficit hawks around for a long time.

Wilson noted that:

During a town hall forum in New Mexico last month, Obama acknowledged that the "long-term deficit and debt that we have accumulated is unsustainable."

But that was hardly the first time Obama or his team had expressed that concern -- in those words. Fully three months ago, Obama budget chief Peter Orszag talked about how the nation was "on an unsustainable fiscal course," and in April, Obama declared: "Without significant change to steer away from ever-expanding deficits and debt, we are on an unsustainable course."

For good measure, New York Times opinion columnist Paul Krugman warns that this is no time to reconsider government spending. While acknowledging that "unconventional measures make the conventionally minded uncomfortable," he writes:

A few months ago the U.S. economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual.

Those demands should be ignored. It's much too soon to give up on policies that have, at most, pulled us a few inches back from the edge of the abyss.

Meanwhile, in other economic news, Damian Paletta writes in the Wall Street Journal:

President Barack Obama is expected Wednesday to propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch almost every corner of banking from how mortgages are underwritten to the way exotic financial instruments are traded.

At the center of the plan, which administration officials are referring to as a "white paper," is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies -- much like the Federal Deposit Insurance Corp. does with failed banks -- and create a new regulator for consumer-oriented financial products, according to people involved in the process.

The goal is to create a more stable regulatory regime that is flexible and effective; that is able to secure the benefits of financial innovation while guarding the system against its own excess.

They conclude:

Some people will say that this is not the time to debate the future of financial regulation, that this debate should wait until the crisis is fully behind us. Such critics misunderstand the nature of the challenges we face. Like all financial crises, the current crisis is a crisis of confidence and trust. Reassuring the American people that our financial system will be better controlled is critical to our economic recovery.